MMI Research Ltd v Cellxion Ltd & Ors

In a patent action, costs are governed by the general Civil Procedure Rules 1998 regime unless Part 63 or its practice direction displaces it. Costs should be assessed issue by issue as far as reasonably possible, while conduct remains relevant, including whether it was reasonable to raise or pursue each allegation. A party cannot run an unlimited number of reasonable points without risk. It should select its best points, and profligate litigation may justify depriving an overall winner of the costs of even the issue on which it succeeded. Issue-by-issue assessment is not mathematically precise; the court makes a necessarily broad estimate. The court made no order as to the principal trial and remitted-issues costs, preserved the post-judgment costs order, and awarded the defendants 70% of the appeal costs.

This was a costs judgment following the Court of Appeal’s main judgment in the same litigation, [2012] EWCA Civ 7. The appeals arose from judgments of Floyd J in the Patents Court, including [2009] EWHC 418 (Pat) and [2011] EWHC 426 (Pat).

The court had to determine five categories of costs: the main trial; proceedings after the first judgment; the appeal leading to remittal; the remitted-issues trial; and the present appeal. The defendants had succeeded on obviousness over Fox but had lost numerous other issues and the remitted-issues appeal. The central question was how costs should be allocated in that context.

1. Costs jurisdiction. The court retained the costs questions rather than remitting them to the trial judge. Remittal or oral argument would have caused delay and unnecessary satellite litigation. [1]
2. Following SmithKline Beecham v Apotex [2004] EWCA Civ 1703, the general costs rules in the Civil Procedure Rules 1998 apply to patent actions unless Part 63 or its practice direction provides otherwise. The factors in rule 44.3 therefore apply. The court also endorsed an issue-by-issue approach, while treating the reasonableness of raising, pursuing or contesting an allegation as a relevant conduct factor. [3]-[4]
3. Issue-by-issue assessment is a guide, not a demand for mathematical precision. Costs are necessarily estimated. Measures such as pages of evidence or transcript are only indicia and cannot be treated as absolutes. [3]
4. A litigant with several potentially reasonable points should select the best few. In patent proceedings, taking an unnecessarily large number of points may justify a costs sanction even where the litigant succeeds overall. [9]
5. The defendants had won overall but had lost many issues, including the remitted issues, and had advanced an unnecessarily large number of points. The court also considered their status as parties defending themselves, the reduction of MMI’s recovery for wasteful evidence, and unsatisfactory evidence from Mr Timson. The appropriate order for the main trial, the related application and the remitted-issues trial was therefore no order as to costs. This deprived the defendants of the costs of the issue on which they succeeded. [6]-[11]
6. The order awarding MMI its post-judgment costs was left undisturbed. The appeal costs were dealt with collectively: the defendants succeeded on the obviousness appeal but lost the remitted-issues appeal. They were awarded 70% of the costs of the appeals. [12]-[15]
7. Any unresolved matters concerning interim payment or interest were to be identified within seven days if the parties could not agree. [16]

• Court of Appeal (Civil Division) — Determined the costs consequences following the main appeal judgment, [2012] EWCA Civ 7. The court made no order as to the principal trial and remitted-issues costs, preserved the post-judgment costs order, and awarded the defendants 70% of the appeal costs.
• High Court of Justice, Chancery Division (Patents Court) — Floyd J gave the judgments from which the appeals arose, including [2009] EWHC 418 (Pat) and [2011] EWHC 426 (Pat).